2013 (12) TMI 1615 - AT - Service Tax

Summary

Issues: Service Tax demand confirmation for 'site formation and clearance' service; Liability to remit Service Tax for components of explosives and diesel supplied free of cost.

Service Tax Demand Confirmation: The Commissioner confirmed a Service Tax demand of &8377; 9,68,44,164 for 'site formation and clearance' service provided during a specific period. The order also mentioned the appropriation of &8377; 8,90,000 already remitted, along with interest and penalties.

Liability for Components Provided Free of Cost: The singular issue revolved around the liability to remit Service Tax for explosives and diesel supplied by the service recipient without any charge or deduction from the consideration payable for the service. The question was whether these components should be included in the taxable value u/s Section 67 of the Finance Act, 1994.

Legal Analysis and Decision: The Tribunal analyzed Section 67(1)(i) of the Finance Act, 1994, which states that the taxable value for a service provided for a consideration in money should be the gross amount charged by the service provider. It was observed that as the diesel and explosives were not part of the consideration provided by the recipient, they should not be included in the taxable value. Consequently, the Tribunal granted a waiver of pre-deposit and stayed further proceedings pending the appeal's disposal.

Tax Demand Breakdown: Out of the total tax demand, a portion related to receipts from the service recipient for bonus and miscellaneous payments. The petitioner had already remitted this component before the adjudication order. The Tribunal clarified that the waiver granted did not cover this specific Service Tax component. If the petitioner had not remitted this amount, it could be recovered through due process of law.

Conclusion: The Tribunal disposed of the stay application based on the analysis and decision regarding the liability for the components provided free of cost. The order was dictated and pronounced in open court, bringing closure to the matter.